The US Treasury reported on Friday that the federal deficit has increased 26% from 2018, to $984 billion. The revenue and spending gap is the highest it has been in seven years.
Corporate tax revenues were up 12% due to a rebound in the second half of the year, while individual tax revenues were up 2%.
Receipts were up 4% through September, while federal spending rose 8%. The expenditures included military needs, interest payment on the national debt, and Medicare.
The government also collected $71 billion in tariffs, a 70% increase from one year ago. The deficit was 4.6%, which was 0.8% higher than last year.
Annual deficits have nearly doubled under President Donald Trump’s tenure notwithstanding an unemployment rate at multidecade lows and better earnings figures. Deficits usually shrink during times of economic expansion as rising incomes and Wall Street profits buoy Treasury coffers, while mandatory spending on items like food stamps decline.
The treasury report will likely relieve the Trump administration, who expected the deficit to hit $1 trillion during the fiscal year. It has been two years since the administration pushed through a $1.5 trillion tax cut that Trump promised would pay for itself.
Despite Mnuchin’s plans, the Congressional Budget Office projects the trillion-dollar deficit could come as soon as fiscal 2020.
Source at CNBC